After the Indian rupee got impacted following unconfirmed reports that the Reserve Bank is considering withdrawing the special dollar swap window opened for oil companies, the reserve Bank of India (RBI) on Friday clarified that it is not considering any such move at present.
"The Reserve Bank clarifies that oil marketing companies' swap window remains operational. Any tapering of the window, as and when it occurs, will be done in a calibrated manner," it said in a statement issued today.
The three state-run oil marketing companies together need nearly USD 400 million every day or USD 8-9 billion every month to pay for their crude imports.
The rupee, which opened strong in the morning, lost the ground after a media report said the government is considering closing the oil swap window.
The rupee gained 13 paise from yesterday's close to 61.10 against the US dollar in early trade and slid to a low of 61.70 in the spot market, which apparently made RBI issue the one-line statement.
After the clarification, the rupee recouped the losses and was trading at 61.25 level at 13.55 pm.
The oil swap window was introduced on August 28, after the rupee hit a life-time low of 68.85.
It has, however, gained to stabilise at the 61-62 levels following some very unconventional moves by the RBI and the government, including the swap window for oil marketing companies.
The oil marketing companies are the biggest buyers of dollars to meet their crude oil imports. The RBI had introduced this special swap window which takes away the oil marketeers' demand off the market.
"The Reserve Bank will undertake sell/buy USD-INR forex swaps for fixed tenor with the oil marketing companies through a designated bank. The swap facility gets operationalised with immediate effect and will remain in place until further notice," it had said in an August 28 statement.
According to some experts, the oil swap window could be done away with following signs of stability in the currency.